Revenue share or a flat fee: how to actually compare the two
Revenue share is an appealing pitch. You pay nothing unless it works. The vendor only wins when you win. What is not to like?
It is a reasonable structure, and for some practices it is the right one. But the comparison almost never gets done properly, so let us do it.
The arithmetic
Say a vendor charges 15% of collected revenue from reactivated patients, and another charges a flat monthly fee. The question is simply: at what volume does the percentage cost more?
Take a practice with 500 patients overdue twelve months or more. A campaign brings back 5%, so 25 patients. If a returning patient produces roughly $255 on that first visit, that is $6,375 recovered in the quarter. At 15%, the revenue share costs about $956.
So far the percentage looks fine. Now extend it.
Those 25 patients do not vanish after one cleaning. Over a year of hygiene, at roughly $510 per patient, they produce about $12,750. If the agreement takes a percentage of everything those patients generate, and most do, the cost is nearer $1,900 for that cohort. Next quarter brings another cohort, and the percentages stack.
A flat fee does not stack. That is the whole difference.
Where the crossover actually sits
The crossover is not a fixed number. It depends on three things:
- How big your lapsed list is. A bigger list means more recovered revenue, which means the percentage grows while the flat fee does not.
- Whether the percentage applies to treatment or just the visit. This is the question that matters most and the one people forget to ask. A patient who comes back for a cleaning and then accepts a $4,000 treatment plan is a very different bill under a revenue share.
- How long the percentage runs. Some agreements take a cut for the life of the patient.
Ask for the answer to number two in writing. If the percentage applies to all production from a reactivated patient, model it against your actual case acceptance, not against a cleaning.
What each structure is really buying
A revenue share transfers risk to the vendor. If nothing works, you pay nothing. That is genuinely valuable if your list is small, if you are unsure whether recall will work for you, or if cash is tight.
A flat fee buys predictability and keeps the upside. If the programme works well, you keep all of it. It also removes a quiet conflict of interest, because nobody has a reason to chase the highest-value treatment rather than the right one.
Both are defensible. What is not defensible is choosing without running the numbers on your own list.
The questions that separate the two
- Does the percentage apply to the first visit, the first year, or the life of the patient?
- Does it apply to treatment, or only hygiene?
- Who decides whether a patient counts as reactivated, and can I audit that?
- What is the minimum term, and what happens to my data and phone numbers if I leave?
- Is there a floor or a monthly minimum underneath the percentage?
That last one catches people. A revenue share with a $1,200 monthly minimum is a flat fee wearing a costume.
On guarantees attached to either model
Both structures often come with a guarantee, and guarantees vary enormously in how much they actually promise. A remedy of “we keep working for free” is quite different from “we refund your money.”
Guarantees are worth reading closely on their own terms, and six questions separate a real one from a comfortable sentence.
It is also worth knowing that the FTC’s rule on consumer reviews and testimonials, in effect since October 2024, prohibits fake reviews and testimonials and the suppression of negative ones. If a vendor’s evidence for their guarantee is a wall of testimonials you cannot verify, that is a reason to ask harder questions, not fewer.
We publish one price and take no share of production, which is a position rather than a virtue. It suits practices with a decent sized list who want to keep the upside. If your lapsed list is under a couple of hundred patients, a percentage model might genuinely serve you better, and I would rather say so.
Run it on your own numbers first. The report will give you the recovered-revenue figure to plug into both sides.